I haven’t written about Gold much recently, which I have been Bullish on for quite some time. (I actually wrote a positive report on it way back in December 2002!)

The chart below comes from former Goldman Sachs technician Charles Nenner. Charles developed a black box algorithm which is now the basis of his work at Cycle Forecaster; its a mix of cycles, techncials and Elliot Wave.

Charles notes that "Gold continues on a buy signal and is moving up in a channel; The downside of the channel for next year is limited to around 445, while the upside is, at the moment, around 550."

With Gold is trading at the top of the channel — we could very easily see a moderate correction. Technically, as long as 445 is not broken, the uptrend should continue.

A good break on the upside out of the channel will be important to
watch, since such a move can lead to an upside acceleration . . .

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Gold Yearly Data Analysis”

My first tip that gold might be an especially interesting place to be was when a junior Canadian exploration company I liked got funding to become a *chinese internet portal* in 2000 — and then, a few months later, promptly gave the money back and washed their hands of the idea. It just smelled like a classic bottoming event. The timing wasn’t perfect, but it turned out to be a pretty good time to double-down your commodities bets.

Gold is due for a pullback as its extremely overbought. However, I would jump all over that pullback. There is barely any resistance from $520 to $700. Gold will hit $700 in 2006 and partly because fundamentally we will reach an inflection point in the economy where if rates rise too much we will see deflation and if rates dont rise enough we will see hyperinflation. Remember that rates follow gold higher. Check history. Rates will be very high before this gold bull is over.

Further, sentiment remains bearish if not indifferent on gold. Its at 24 year highs and its barely being reported. Sentiment, technicals and fundamentals are all in place for this gold bull market to kick into high gear very shortly.

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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